Category Archives: Health Care

As more care providers—sensing that the days of fee-for-service care are limited—begin to experiment with alternative payment models, bundled payments seem to be emerging as the most popular of these options so far. As its name implies, bundled payments aggregate a range of services together under the umbrella of one episode of care (for which a single reimbursement is provided), and they can be a very useful way for care providers to “test drive” alternative payments without yet having to fully embrace more complex propositions such as population risk. Indeed, bundled payments have become so popular that they have moved beyond the elective procedures with which they were originally associated, and they can now be found in a range of areas including outpatient services, pediatrics, newborn delivery, disease, and oncology.

Bundled payments may be conceptually simple and have a relatively low entry point, but that doesn’t mean care providers don’t need a smart and effective strategy to implement this alternative payment model. A recent article from GE Healthcare Camden Group offers the following tips for making bundled payment programs a success.

Get into the startup mindset.

Implementing alternative payment models such as bundled payments will inevitably be disruptive to an organization. Rather than fighting this, providers are best served by adopting a startup attitude, recognizing that industry transformation is the new norm and that innovation is about action. They must realize that embracing a new pace and new ideas with rigor and discipline will yield strong results.

Perfect the pitch.

When it comes to bundled payments, health care executives are not always clear on exactly what they are selling to payers. Providers need to take the time to figure out their unique value proposition, remembering that simply competing on price or demonstrating “fee-for-value” is not sufficient to differentiate them from their competitors. In addition, they need to work on the narrative of this new method of delivery and take payers along on the ride from “what is” to “what could be.”

Prioritize digital market share.

Heath care is an increasingly mobile world, with online access to everything from health records to physicians now easier and more secure than ever. Moreover, real-time, predictive analytics from providers are always available at patients’ fingertips. Such predictive tools are a key element of bundled payments, which rely on them to enable early intervention in at-risk cases and to prevent avoidable readmissions. Consequently, any discussion of market share in the new value-based realm must include—and prioritize—digital market share.

Open up the closed architecture system.

The traditional “closed architecture” system that dominates the health care landscape no longer serves anyone well: neither patients and their families, nor their providers. A major part of successful payment reform—and, indeed, health care reform in general—requires that providers open their assets, providing transparency into their brands, contact lists, and distribution channels in order to monetize new opportunities and big ideas. In addition, shaking up traditional organizational structures and connecting teams across functions and settings will help health care organizations to be better placed to scale up rapidly and respond more quickly to market changes.

Balance the talent.

Hiring the right talent for an industry in the throes of disruption and transformation is a challenging task, and health care is no exception. Health care executives need to strike the right balance between having enough innovative thinkers on board to re-envision the new care landscape and masters of execution to ensure that these transformations stick, while speed to market is maintained.

Design the care model with scale in mind.

As previously mentioned, successful bundled payments are all about predictable costs and quality for a single episode of care. Therefore, it is vital that providers be able to develop and execute a standardized care model that is an appropriate fit for the population and the accepted bundled price. This will allow for rapid scalability, which is a key element of success.

Focus on the end game.

It’s important for providers to remember that bundled payments are a first step along the reimbursement continuum toward the total cost of care and population health management. Therefore, it’s critical not to plan and implement bundled payments in isolation, but rather to keep an eye on the end game and ensure that the bundled payment strategy is aligned with the overall, long-term population health strategy. It’s the difference between building bundles in silos without regard for the total cost of care management, and building bundles in context.

Know the stakes.

The disruptive transformation that bundled payments herald may not be welcome by everyone, but it’s vital not to forget about what’s at stake. In 2014, the US spent $3.8 trillion on health care (a price tag almost double that of other wealthy nations, according to the Commonwealth Fund) without getting good value for its money. Shockingly. low rankings for infant mortality, life expectancy, and efficiency were posted in that same year. The effort to manage the total cost of care is therefore a battle very much worth fighting.

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